FreeMarketDuck.com

Idaho's Weekly Journal of Local & National Commentary Week
2815

byFree Market
Duck

Obama's Three Economic Fallacies...or,
Why He Doesn't Get It

Oct 1, 2010

Washington, DC – Has anybody else noticed a
consistent theme running through President Obama's ideology of state collectivism through which he is
attempting to "fundamentally transform America?" There are three basic
economic fallacies uponst which rest Obama's ridiculous programs:

(1) Wealth
is not finite. Wealth is infinite and is the result of transferring
ideas into time and labor saving devices or services. Therefore,
contrary to what the Obama socialists think, the rich did not necessarily --
i.e., as a result of free market capitalism -- get rich by stealing from the
poor. Those who did get rich by stealing from the poor or anybody else
usually did so with the help of government intervention and by receiving
special interest money from the government. However, the latter
describes state collectivism, not free market capitalism. Therefore,
the major basis for Obama's ideology to "redistribute the wealth" rests upon
the economic fallacy that wealth is finite. It is not.

(2) Value
does not reside in any labor or commodity per se. In economics, value
resides in the subjective determination
of the consumer. Value is not an objective fact. Value is the
anticipated service that the consumer hopes to receive in his exchange
process and each trader values his/her anticipated service to be rendered
differently, i.e. unequally, according to their own prioritized goals.
Exchanges in the market do not take place because they are considered equal
by each party but rather precisely because they are considered unequal to
each party, each person qualitatively valuing his/her anticipated service to
be received higher than what he/she gives up. Example to prove that
value does not reside in labor per se: a million men dig a million
holes in the middle of the desert, rendering no service to anybody.
Their labor has no value whatsoever, even though they have expended tons of
work. The Rolling Stones rock group cut a new CD called "Start Me Up"
in 15 minutes in the recording studio and sell 50 million copies, earning a
billions dollars. They have expended very little labor but have -- in
the qualitative decision of the consumers -- provided a service the
consumers value and will voluntarily pay for. Therefore, the 2nd major
basis for Obama's ideology to "redistribute the wealth" and use government
money to finance labor unions such as the SEIU and the AFL-CIO rests upon
the economic fallacy that value resides in the expenditure of labor per se.
It does not.

(3) Money is
not just printed paper or credit issued by the government. Paper money
must be an IOU for something such as gold, silver, or some other commodity.
Paper money is a receipt for the real commodity money much like the Pink
Slip to your car is an ownership title; but the Pink Slip is not the real
car. Remove the relationship between the paper receipt and the
commodity or service for which the receipt was issued and you have nothing
but hot air. And that is exactly what the Federal Reserve, Congress,
and the Obama Administration are doing by issuing inflated U.S. Dollars
through fractional reserve banking (and not even that, today, since there is
no gold or silver used as a reserve) during their "counterfeiting" of our
paper money. Issuing virtual credit through computers amounts to the
same fraud. Therefore, it is an economic fallacy to think that one can
"stimulate" an economy into wealth or job production or jump start
businesses by inflating paper currency. Hyper-inflation does nothing
but rob everybody of the unit value of their medium of economic exchange
while providing billions in economic advantage to those -- the central
bank's buddies -- who receive the money first. Non-collateralized
paper money is not gold, is not silver, and is not a '57 Chevy. It is
just fiat hyper-inflated green paper with nifty official-looking government
symbols printed all over it. – FM Duck